Chapter:- 3
Forfeiture and Re-issue of Share
1. Write the meaning of forfeiture?
Ans:-Forfeiture of shares means the cancellation of membership of the shareholders who failed to pay allotment and calls. Sometimes, a shareholder is unable to pay the amounts of allotment and calls on due date and those shares are captured by the company according to the Articles of association of the company.
2. When and how the shares of the company are forfeited?
Ans:-If any shares holder fails to make the payment of allotment or call money, the company may forfeit such shares. The effect if forfeiture is that the names if such shareholders are removed form the register of member, the allotment is cancelled and the amount paid by the shares holders is forfeited.